If you’re looking to invest in real estate, you may be wondering where you should be investing to get the best bang for your buck!
Nowadays, there are so many opportunities for investors to venture outside of their hometowns and cities. In fact, if you’re considering investing in real estate, you can consider looking throughout North America for lucrative property deals!
Both Canada and the United States have their pros and cons when it comes to investing, but there are some key differences you should be aware of.
In this article, we’ll explore the Canadian and US real estate markets, why it’s important to diversify into both markets, the best cities to invest in.
Compared to the United States, investing in Canadian real estate is a relatively new concept. However, over the past few years, Canada has seen a dramatic increase in interest from foreign investors. This is partly due to the stable economy and growing housing market in Canada.
One of the biggest benefits of investing in Canadian real estate is that it’s a relatively safe investment. The housing market is not as volatile as the US market, and it’s less likely to experience a crash. Additionally, Canada has a strong economy and low levels of debt, making it a desirable place to invest.
According to Better Dwelling, “As of Q2 2021, Canada has seen real home prices rise 139% since 2005. In contrast, the US has only seen real home prices rise 10% over the same period. Canadian home prices have seen 13x the growth of the US over the same period.”
In contrast, the US real estate market is significantly more mature than the Canadian market, and there is a greater variety of investment options available.
Benefits of investing in the Canadian real estate market
There are a few key benefits of investing in Canadian real estate. Let’s take a closer look:
1. Stability – Canada is a stable country with strong economic fundamentals. This stability makes the Canadian real estate market an attractive place to invest your money.
2. Renters are plentiful – In most major Canadian cities, there is a high population density and a high percentage of renters. This means that there is a lot of demand for rental units, which drives up rents and provides good investment returns.
3. Limited foreign ownership – In Canada, there is tight control over foreign ownership. This limits the amount of foreign investment in the market, which helps to maintain stability and control prices.
4. High returns – In general, Canadian real estate provides higher returns than similar investments in the United States. This is due to the combination of stable prices and high rents.
Benefits of investing in the U.S. real estate market
The U.S. real estate market also has fantastic upsides such as:
1. Higher returns – In most cases, U.S. real estate provides higher returns than Canadian real estate. This is due to the combination of higher prices and stable rents.
2. Liquidity – The U.S. real estate market is much more liquid than the Canadian market. This means that it is easier to sell your property if you need to.
3. Diversification – Investing in U.S. real estate can give you access to a wider assortment of properties helping you diversify your portfolio and reduce your risk exposure.
4. Lower taxes – In the United States, there are lower taxes on real estate investments than in Canada. This can save you a lot of money in the long run.
Similarities between the U.S. and Canadian real estate markets
When diversifying your real estate portfolio across North America, it’s nice to know that Canada and the United States have several similarities including:
1. Mature markets– The U.S. and Canadian real estate markets have been around for a long time, and they are both relatively stable.
2. Rising property values – In both markets, property values are steadily increasing. This makes it a good time to invest in real estate.
3. Rising rents – In both markets, rents are going up, which means that you can earn good returns on your investment.
4. Similar regulations – The regulations governing real estate investments are similar in both countries. This makes it easy to invest in either market.
Aside from these similarities, there are only a few key differences to keep in mind. For example, the U.S. market is much more liquid than the Canadian market which means that it is easier to sell your property if you need to.
The U.S. real estate market is also much more developed than the Canadian market. This means that there are more opportunities to invest in different types of properties.
Finally, the U.S. market is more competitive than the Canadian market which means that you will have to compete with more buyers for the best properties.
Which city is best to invest in real estate?
There is no one-size-fits-all answer to this question. Every city has its own unique advantages and disadvantages when it comes to investing in real estate. However, some cities are definitely better than others.
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Here are five of the best cities to invest in real estate in Canada:
1. Toronto – Toronto is one of the largest and most vibrant cities in Canada. It has a strong economy and a high population density, making it a great place to invest in rental property.
2. Vancouver – Vancouver is also a large and prosperous city with a high population density. It is one of the most expensive cities in Canada to live in, which makes it a good place to invest in property.
3. Calgary – Calgary is the third-largest city in Canada and it has a strong economy. It is also a great place to invest in real estate because of its low taxes and high returns.
4. Montreal – Montreal is the largest city in Quebec and it has a diverse economy. It is a great place to invest in real estate because of its high population density and low taxes.
5. Edmonton – Edmonton is the fifth largest city in Canada and it has a strong economy. It is also a great place to invest in real estate because of its low taxes and high returns.
Here are five of the best cities to invest in real estate in the United States:
1. New York City – New York City is the largest city in the United States, and it has a strong economy. It is also a great place to invest in property because of its high population density and high rents.
2. Los Angeles – Los Angeles is the second-largest city in the United States and it has a strong economy. It is also a great place to invest in property because of its high population density and high rents.
3. San Francisco – San Francisco is the fourth largest city in the United States and it has a strong economy. It is also a great place to invest in property because of its high population density and high rents.
4. Chicago – Chicago is the third-largest city in the United States and it has a strong economy. It is also a great place to invest in property because of its high population density and low taxes.
5. Dallas – Dallas is the ninth-largest city in the United States and it has a strong economy. It is also a great place to invest in property because of its high population density and low taxes.
As you can see, there are a lot of great places to invest in real estate in both Canada and the United States.
It’s also important to consider investing in areas that may not be well established, yet still have tremendous potential for growth.
At ButProperly, we have properties in up-and-coming urban centers like Phoenix and fast-growing cities like Austin, Texas. Don’t be afraid to branch out and explore new locations that are poised for economic expansion!
The benefits of diversifying real estate by location
When investing in real estate, it is important to diversify your portfolio by location. This means investing in property in different cities and countries. By doing this, you will minimize your risks and maximize your returns.
Investors that focus solely on local properties end up missing out on several opportunities including new developments and up-and-coming cities outside their marketplace! You’ll also be able to build a very diverse portfolio focusing on both capital appreciation and cash flow investing in real estate at all different price points.
Additionally, investing in property in different countries will help you protect your portfolio from any potential economic downturns. For example, if the economy of the United States weakens, you can rely on your investments in Canadian real estate to help offset any losses.
Having property in both the U.S. and Canadian markets will allow you to better leverage your assets. For example, if you need to borrow money to invest in more real estate, you’ll be able to get a better interest rate as a Canadian investor because the lender will see that you have diversified your portfolio.
Conclusion
There are many great reasons to invest in real estate in both Canada and the United States. By diversifying your portfolio by location, you’ll be able to minimize your risks and maximize your returns. Additionally, investing in property in different countries will help you protect your portfolio from any potential economic downturns. Lastly, having property in both the U.S. and Canadian markets will allow you to better leverage your assets.
So, what are you waiting for? It’s time to start investing to build a lucrative real estate portfolio!
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